Blackberry 2004 Annual Report Download - page 40

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Research In Motion Limited • Incorporated Under the Laws of Ontario (In thousands of United States dollars, except per share data, and except as otherwise indicated)
expenditures. Investment tax credits are recorded
when there is reasonable assurance that the
Company will realize the investment tax credits.
Assistance related to the acquisition of capital
assets used for research and development is
credited against the cost of the related capital
assets and all other assistance is credited against
related expenses, as incurred.
(s) Statements of comprehensive income (loss)
U.S. GAAP, SFAS 130, Reporting Comprehensive
Income, establishes standards for the reporting and
display of comprehensive income and its components
in general-purpose financial statements. Comprehensive
income is defined as the change in net assets of a
business enterprise during a period from transactions
and other events and circumstances from non-owner
sources, and includes all changes in equity during a
period except those resulting from investments by
owners and distributions to owners. The reportable
items of comprehensive income are cash flow
hedges as described in note 21, and changes in the
fair value of investments available for sale as
described in note 4.
(t) Earnings (loss) per share
Income (loss) per share is calculated based on the
weighted average number of shares outstanding
during the year. The treasury stock method is used
for the calculation of the dilutive effect of stock
options and common share purchase warrants.
(u) Stock-based compensation plan
The Company has a stock-based compensation plan,
which is described in note 11(b). The options are
granted with an exercise price equal to the fair
market value of the shares on the day of grant of the
options. No compensation expense is recognized
when stock options are issued to employees. Any
consideration paid by employees on exercise of
stock options is credited to share capital.
Compensation expense is recognized when stock
options are issued with an exercise price that is less
than the market price on the date of grant. The
difference between the exercise price and the
market price on the date of grant is recorded as
compensation expense (“intrinsic value method”).
The exercise price of options granted by the
Company is the market value of the underlying stock
at the date of grant; consequently, no compensation
expense is recognized. This method is consistent
with U.S. GAAP, APB Opinion 25, Accounting for
Stock Issued to Employees.
SFAS 123, Accounting for Stock-Based
Compensation, requires proforma disclosures of net
income (loss) and earnings (loss) per share, as if the
fair value method, as opposed to the intrinsic value
method of accounting for employee stock options,
had been applied. The disclosures in the following
table present the Company’s net income (loss) and
earnings (loss) per share on a proforma basis using
the fair value method as determined using the
Black-Scholes option pricing model:
For the year ended February 28, 2004 March 1, 2003 March 2, 2002
Net income (loss) - as reported $ 51,829 $ (148,857) $ (28,321)
Stock-based compensation costs for the year 20,033 20,296 19,773
Net income (loss) - proforma $ 31,796 $ (169,153) $ (48,094)
Proforma earnings (loss) per common share:
Basic $0.40 $ (2.18) $ (0.61)
Diluted $0.39 $(2.18) $ (0.61)
Weighted average number of shares (000’s):
Basic 79,650 77,636 78,467
Diluted 81,934 77,636 78,467